May 04, 2007. /Lesprom Network/. International Paper reported on May 3, 2007 preliminary first-quarter 2007 net earnings of $434 million ($0.97 per share) compared with fourth-quarter net earnings of $1.98 billion ($4.38 per share) and a loss of $1.2 billion ($2.54 per share) in the first quarter of 2006. Amounts in all periods include special items, including the receipt of proceeds from the sale of the majority of the company's U.S. forestlands in the fourth quarter of 2006. Earnings per share from continuing operations and before special items were $0.45, versus $0.47 in the fourth quarter of 2006 and $0.12 in the 2006 first quarter. Quarterly net sales were $5.2 billion, compared with $5.3 billion in the fourth quarter of 2006, and $5.5 billion in the first quarter of 2006, primarily reflecting lower forestland sales. Industry segment operating profits continued to rise to $530 million for the 2007 first quarter versus $425 million in the 2006 fourth quarter and $411 million in the first quarter of 2006. The increase reflects continued strong average price realizations and strong manufacturing operations. "We've hit the ground running in 2007 with our best first quarter since 2000 and operational margins up nearly 300 basis points versus the first quarter last year," said chairman and chief executive officer John Faraci. "Our pricing momentum remains strong, with volumes flat overall as we took some downtime and shifted product among global markets to match our supply with our customers' demand. Our manufacturing operations performed well and improvements in cost and mix more than offset some overall increases in input costs. We've also now bought more than $800 million in shares on the open market, which has brought our outstanding share count down." Commenting on the second quarter of 2007, Mr. Faraci said, "We expect somewhat higher earnings from continuing operations in the second quarter, with seasonally stronger volumes and improvements in average price realizations. We continue to improve the performance of our global manufacturing operations, and we'll realize earnings from our first full quarter of operations from the Luiz Antonio mill in Brazil. We expect that input costs will remain high and also expect to have slightly higher maintenance outage expense in the second quarter." International Paper, founded in 1898, is a global uncoated paper and packaging company with primary markets and manufacturing operations in North America, Europe, Russia, Latin America, Asia and North Africa. Its uncoated papers and packaging businesses are complemented by xpedx, North America's largest distributor of printing papers and graphics supplies and equipment. Headquartered in the United States, International Paper employs approximately 54 000 people in more than 20 countries, and serves customers worldwide. Annual sales are about $22 billion. International Paper partners with customers and environmental, academic, civic and governmental organizations, as well as landowners and harvesting professionals, to encourage responsible forest stewardship, improve the health and productivity of forestlands and increase recovery of our recyclable products. The company has a long-standing policy of using no wood from endangered forests.